90c No Problem
Another good week in a long line for sales and exports. Sales at 225 krb had China high at 62, Viet 2nd at 31, and Turk 3rd at 30. New crop sales were splendid at 92 krb, led by Mex with 56 and Turk for 23. Combined sales were 317, roughly avg since Nov. Shipments were hot at 375 krb, with the target avg now 293.
Weather forecast for the Llano Estacado has crawfished to a mere 1/4", and that's it for 10 days, according to Weather Underground. Another service shows the east half of 1N can get 1.5", the west half 1", ditto for the north of 2N. It shows the north part of 1S getting 1/2", and the further south less and less. Rain chances start Fri late afternoon and go till about noon Sat.
Weather and demand remain locked in to the bull side, aided by row crop alternatives that are clinging to a high level of profitable prices. The only thing a bear can point to is a modest rise in the $, and bloated spec long positions. The uncertainty surrounding the Uighur issue and child labor in Xinjiang has convinced some traders that China has bought more cotton than needed so as to get ahead of bans. Supposedly they are now buying more yarn than cotton to circumvent the ban. Difficult to know, but we don't see the ban as being effective, and China will work an end run. Glancing at the world balance sheet after the report, it remains larded with too much cotton, 95 Mb in the end. If the Chinese hoarding years are excluded, this is the 2nd largest world carryout all-time, as is the 80% ratio. Mother Nature has chopped off 10 Mb from this year's supply, but this market is overly supplied. The location of much of the stocks is what has prompted a run to 95c.
Technicals
This is the 2nd week of Mar, and is exact timing for the Fib count of 144 months from the major low in Mar 2008 at 4001c. Next week is exact timing for a 233 month Fib count from the major low of Oct 2001 at 2820. The end of this month is the 1 year anniversary of the major low at 4835.
